, Columnist
The American Divide Exposes the High GDP Fallacy
Two Americas can’t co-exist forever.
Photographer: Bryan Dozier/AFP via Getty Images
The American economy is a wonder. The Economist observed that average wages in America’s poorest state, Mississippi, are higher than those in Britain, Canada and Germany. American GDP per capita now runs roughly 40% above western Europe. Post-pandemic productivity growth has been significantly faster than that of the eurozone. The consensus is settled: the American economy is the model.
It’s certainly a model. American productivity really is higher than European productivity. But that doesn’t tell us who benefits. America isn’t one country; it’s two. In one, things have never been better, while the other is suffering.